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Tuesday 26th of May 2009
December 22, 2008

Hometrack sees house price falls into 2010


by Gill Montia
Hometrack sees house price falls into 2010

Hometrack is predicting that UK house prices will fall by a further 10% during 2009, with the decline continuing in 2010 but slowing to three per cent over the year.

The property intelligence website estimates that the average cost of a home has fallen by a modest 9% this year, compared with Nationwide at minus 13.9% and Halifax at minus 14.9%.

According to Hometrack, the peak-to-trough decline will be in the region of 22%, although homeowners may disagree.

Those who base the market peak on what they think they could have sold their homes for in 2007 will experience a fall of closer to 30%.

Once prices have bottomed out, Hometrack expects affordability, in terms of mortgage servicing costs, to be close to the levels seen in the early 1990s.

The firm’s director of research, Richard Donnell, describes the UK housing market as having experienced a total reversal of fortunes in 2008.

He believes that the onset of the credit crisis acted as a catalyst for a downturn in both volumes and prices but adds that structural factors will continue to play an important part in the market.

Hometrack is also forecasting that 70,000 homeowners will be repossessed during 2009. The prediction is slightly below that of the Council of Mortgage Lenders at 75,000.

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